Form U-3A-2
File No. 69-232
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT BY HOLDING COMPANY CLAIMING EXEMPTION
UNDER RULE U-3A-2 FROM THE PROVISIONS OF THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC. hereby files with the
Securities and Exchange Commission, pursuant to Rule 2, its statement claiming
exemption as a holding company from the provisions of the Public Utility
Holding Company Act of 1935 and submits the following information:
1. Claimant - Southeastern Michigan Gas Enterprises, Inc.
405 Water Street
Port Huron, Michigan 48060
State of organization - Michigan
Nature of business - Holding Company
All subsidiaries (both first and second tier) are
incorporated in Michigan.
Subsidiaries - Southeastern Michigan Gas Company
2915 Lapeer Road
Port Huron, Michigan 48060
Nature of business - Purchase, distribution, sale, and
transport of natural gas to residential, commercial and
industrial customers in two service areas, one located
in and about Port Huron in southeastern Michigan and
the other located in and about Albion in south-central
Michigan. The Company's general offices are located in
Port Huron.
Michigan Gas Company
16587 Enterprise Drive
Three Rivers, Michigan 49093
Nature of business - Purchase, distribution, sale, and
transport of natural gas to residential, commercial and
industrial customers in the service area in the
southwest portion of lower Michigan and the central and
western area of the Upper Peninsula of Michigan. Also
sells propane through a subsidiary.
Battle Creek Gas Company
55 Hamblin Avenue
Battle Creek, Michigan 49017
Nature of business - Purchase, distribution, sale, and
transport of natural gas to residential, commercial and
industrial customers in the service area in and about
Battle Creek, Michigan.
SEMCO Energy Services, Inc.
405 Water Street
Port Huron, Michigan 48060
State of organization - Michigan
Nature of business - Market natural gas in the spot
market. Match gas buyers to producers with surplus gas
supplies. Arrange transportation to move those
supplies from producer to buyer. Also engaged in oil
and gas exploration, gas gathering, gas transmission,
gas storage, real estate development and leasing of
vehicles and office equipment through its subsidiaries.
2. Properties of Claimant and Subsidiary Public Utility Companies.
(a) Claimant (Southeastern Michigan Gas Enterprises, Inc.) -
The total properties of the Claimant consist of the Common Stock
of Southeastern Michigan Gas Company, Michigan Gas Company, Battle
Creek Gas Company, SEMCO Energy Services, Inc., leasehold improvements
and office equipment.
(b) Subsidiaries
Southeastern Michigan Gas Company
Southeastern Michigan Gas Company owns gas supply systems which
include approximately 100 miles of transmission pipelines and 1,600
miles of distribution pipelines. The pipelines are located in
southeastern Michigan (centered in and around the City of Port Huron)
and south-central Michigan (centered in and around the City of
Albion).
Southeastern's underground storage system consists of six salt
caverns and a depleted oil field, located in St. Clair County,
Michigan, together with dehydration, measuring, compressor and
transmission facilities. The aggregate working capacity of the system
is approximately 5.2 billion cubic feet (Bcf), with a capacity to
deliver 86 million cubic feet (MMcf) on a peak day. Underground
storage services are provided to others on a short-term basis,
depending on available capacity.
Southeastern Michigan Gas Company also owns meters and service
lines, gas regulating and metering stations, garages, warehouses and
other buildings necessary and useful in the conduct of its business.
The Company leases computer and transportation equipment.
The principal plants and properties of Southeastern Michigan Gas
Company are held subject to the lien of Southeastern Michigan Gas
Company Indenture of Mortgage and Deed of Trust securing its First
Mortgage Bonds.
Southeastern Michigan Gas Company's distribution system and
service lines are, for the most part, located on or under public
streets, alleys, highways, and other public places, or on private
property not owned by Southeastern Michigan Gas Company with
permission or consent, except to an inconsequential extent, of the
individual owners. Southeastern Michigan Gas Company's mains and
distribution system located on or under public streets, alleys,
highways, and other public places were all installed under valid
rights and consents granted by appropriate local authorities.
Michigan Gas Company
Michigan Gas Company owns gas supply systems located in the
southwest portion of Michigan's lower peninsula and the central and
western areas of Michigan's upper peninsula. The systems include
approximately 2,000 miles of distribution pipeline, meters, service
lines, gas regulating and metering stations, garages, warehouses, and
other buildings necessary and useful in the conduct of its business.
The Company leases computer equipment, transportation equipment, and
certain buildings.
Michigan Gas Company's distribution system and service lines are
for the most part, located on or under public streets, alleys,
highways, and other public places, or on private property not owned
by Michigan Gas with permission or consent, except to an
inconsequential extent, of individual owners. Michigan Gas Company's
mains and distribution system located on or under public streets,
alleys, highways, and other public places were all installed under
valid rights and consents granted by appropriate local authorities.
Battle Creek Gas Company
Battle Creek Gas Company owns gas supply systems which, include
approximately 30 miles of transmission pipelines and 600 miles of
distribution pipelines. The pipelines are located in southwestern
Michigan (centered in and around the City of Battle Creek, Michigan).
Battle Creek Gas Company owns and operates underground gas
storage facilities in two depleted salt wells and a depleted gas
field. The aggregate working capacity of the storage system is
approximately 1.7 Bcf.
Battle Creek Gas Company also owns meters and service lines, gas
regulating and metering stations, garages, warehouses and other
buildings necessary and useful in the conduct of its business. The
Company leases computer and transportation equipment.
Battle Creek Gas Company's distribution system and service lines
are, for the most part, located on or under public streets, alleys,
highways, and other public places, or on private property not owned
by Battle Creek Gas Company with permission or consent, except to an
inconsequential extent, of the individual owners. Battle Creek Gas
Company's mains and distribution system located on or under public
streets, alleys, highways, and other public places were all installed
under valid rights and consents granted by appropriate local
authorities.
All of these Subsidiaries' properties are located in the State of
Michigan.
3. The following information is submitted for the calendar year 1994 with
respect to the Claimant and its subsidiary public utility companies:
<TABLE>
<CAPTION>
Subsidiaries
Claimant -----------------------------------------------------
(Southeastern Southeastern
Michigan Gas Michigan Battle Creek Michigan
Enterprises Inc.) Gas Company Gas Company Gas Company
----------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
(a) Mcf of Natural or manufactured
gas distributed at retail None 14,900,000 Mcf 5,500,000 Mcf 15,500,000 Mcf
(b) Mcf of natural or manufactured
gas distributed at retail outside
of the State in which each
company is organized None None None None
(c) Mcf of natural or manufactured
gas sold at wholesale outside
the State in which each company
is organized or at the State line None None None None
(d) Mcf of natural or manufactured
gas purchased outside the State
in which each company is
organized or at the State line None 16,700,000 Mcf 5,600,000 Mcf 16,900,000 Mcf
</TABLE>
4. Not Applicable.
EXHIBIT A - FINANCIAL STATEMENTS
A consolidating statement of income and surplus of the Claimant and
its subsidiary companies for the last calendar year, together with a
consolidating balance sheet of Claimant and its subsidiary companies as of
the close of such calendar year accompanies this filing.
EXHIBIT B - FINANCIAL DATA SCHEDULE
Financial Data Schedule showing consolidated Total Assets, Total
Operating Revenues and Net Income.
EXHIBIT C
Not applicable.
The above-named Claimant has caused this statement to be duly executed
on its behalf by its authorized officer on this 24th day of February, 1995.
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
(Name of Claimant)
By WARD N. KIRBY
Ward N. Kirby, President and C.E.O.
Corporate Seal
Attest:
LAWRENCE J. GAGNON
Lawrence J. Gagnon, Secretary
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Lawrence J. Gagnon Vice President, Secretary and General Counsel
(Name) (Title)
405 Water Street, Port Huron, Michigan 48060
(Address)
<PAGE>
Exhibit A
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED INCOME STATEMENT
DECEMBER 1994
(Unaudited Statement)
<CAPTION>
TWELVE MONTHS TO DATE LOCAL DISTRIBUTION COMPANIES
--------------------- ------------------------------------- SEMCO
1994 ELIM. PARENT SEMGC BCGC MIGC ENERGY
------------ ------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUE
Gas sales revenue
Residential $121,065,771 $ 0 $ 0 $49,415,860 $21,173,074 $50,476,837 $ 0
Commercial 59,412,717 0 0 21,709,808 7,824,743 29,878,166 0
Industrial 15,480,959 0 0 3,025,918 1,846,375 10,608,666 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
Total gas sales revenue $195,959,447 $ 0 $ 0 $74,151,586 $30,844,192 $90,963,669 $ 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
Gas marketing $158,283,778 $(34,532,007) $ 0 $ 0 $ 421,786 $ 0 $192,393,999
Transportation 11,999,275 0 0 3,056,661 4,305,933 4,636,681 0
Other operations 6,187,390 (1,744,861) 0 490,192 58,295 612,707 6,771,057
------------ ------------ ----------- ----------- ----------- ----------- ------------
TOTAL OPERATING REVENUE $372,429,890 $(36,276,868) $ 0 $77,698,439 $35,630,206 $96,213,057 $199,165,056
------------ ------------ ----------- ----------- ----------- ----------- ------------
OPERATING EXPENSES
Cost of gas sold $135,669,336 $ 0 $ 0 $47,240,464 $20,278,075 $68,150,797 $ 0
Cost of gas marketed 153,972,702 (34,532,007) 0 0 0 0 188,504,709
Operations 31,054,722 (1,744,861) 78,095 11,642,144 5,487,759 12,414,073 3,177,512
Maintenance 4,503,115 0 468 2,226,984 890,038 1,334,914 50,711
Depreciation 11,549,280 0 95,718 3,868,531 1,850,635 3,358,599 2,375,797
Income taxes 5,203,737 2,610,057 (3,055,576) 2,019,240 1,269,261 1,604,447 756,308
Taxes other than income 8,185,519 0 (4,398) 3,538,100 1,460,325 2,745,404 446,088
------------ ------------ ----------- ----------- ----------- ----------- ------------
TOTAL OPERATING EXPENSES $350,138,411 $(33,666,811) $(2,885,693) $70,535,463 $31,236,093 $89,608,234 $195,311,125
------------ ------------ ----------- ----------- ----------- ----------- ------------
OPERATING INCOME $ 22,291,479 $ (2,610,057) $ 2,885,693 $ 7,162,976 $ 4,394,113 $ 6,604,823 $ 3,853,931
------------ ------------ ----------- ----------- ----------- ----------- ------------
OTHER INCOME
Non-operating income $ 3,867,029 $ (7,457,307) $ 7,524,042 $ 2,050,026 $ 926,175 $ 1,164,595 $ (340,502)
Non-operating expenses 3,862,029 0 0 1,740,412 911,446 1,210,171 0
Other income taxes 47,523 (2,610,057) 2,632,124 106,281 5,155 76,235 (162,215)
------------ ------------ ----------- ----------- ----------- ----------- ------------
OTHER INCOME, NET $ (42,523) $ (4,847,250) $ 4,891,918 $ 203,333 $ 9,574 $ (121,811) $ (178,287)
------------ ------------ ----------- ----------- ----------- ----------- ------------
INCOME BEFORE DEDUCTIONS $ 22,248,956 $ (7,457,307) $ 7,777,611 $ 7,366,309 $ 4,403,687 $ 6,483,012 $ 3,675,644
------------ ------------ ----------- ----------- ----------- ----------- ------------
INCOME DEDUCTIONS
Interest on long term debt $ 8,605,435 $ (3,729,650) $ 6,672,448 $ 1,852,854 $ 1,404,284 $ 2,405,499 $ 0
Other interest 1,787,980 (3,727,657) 1,705,226 516,183 805,178 609,871 1,879,179
Amortization of debt expense 382,329 0 62,337 169,101 30,864 120,027 0
Dividends on pref. of sub. 178,006 0 0 178,006 0 0 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
TOTAL INCOME DEDUCTIONS $ 10,953,750 $ (7,457,307) $ 8,440,011 $ 2,716,144 $ 2,240,326 $ 3,135,397 $ 1,879,179
------------ ------------ ----------- ----------- ----------- ----------- ------------
NET INCOME $ 11,295,206 $ 0 $ (662,400) $ 4,650,165 $ 2,163,361 $ 3,347,615 $ 1,796,465
------------ ------------ ----------- ----------- ----------- ----------- ------------
Equity earnings of subs. $ 0 $(11,957,610) $11,957,610 $ 0 $ 0 $ 0 $ 0
Dividends on conv. preferred 17,529 0 17,529 0 0 0 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
NET INC BEFORE EXTRAORDINARY ITEM $ 11,277,677 $(11,957,610) $11,277,681 $ 4,650,165 $ 2,163,361 $ 3,347,615 $ 1,796,465
------------ ------------ ----------- ----------- ----------- ----------- ------------
Extraordinary item $ 1,285,832 $ 0 $ 1,285,832 $ 0 $ 0 $ 0 $ 0
------------ ------------ ----------- ----------- ----------- ----------- ------------
NET INCOME FOR COMMON $ 9,991,845 $(11,957,610) $ 9,991,849 $ 4,650,165 $ 2,163,361 $ 3,347,615 $ 1,796,465
============ ============ =========== =========== =========== =========== ============
EARNING PER AVERAGE SHARE $ .90
============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED INCOME STATEMENT
DECEMBER 31, 1994
(Unaudited Statement)
<CAPTION>
BATTLE CREEK GAS CO MICHIGAN GAS CO
------------------------------------- -------------------------------------
PUSH PURCHASE SEPARATE PUSH PURCHASE SEPARATE
TWELVE MONTHS TO DATE DOWN ADJUSTMENTS COMPANY DOWN ADJUSTMENTS COMPANY
- --------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Gas sales revenue
Residential $21,173,074 $ 0 $21,173,074 $50,476,837 $ 0 $50,476,837
Commercial 7,824,743 0 7,824,743 29,878,166 0 29,878,166
Industrial 1,846,375 0 1,846,375 10,608,666 0 10,608,666
----------- ----------- ----------- ----------- ----------- -----------
Total gas sales revenue $30,844,192 $ 0 $30,844,192 $90,963,669 $ 0 $90,963,669
----------- ----------- ----------- ----------- ----------- -----------
Gas marketing $ 421,786 $ 0 $ 421,786 $ 0 $ 0 $ 0
Transportation 4,305,933 0 4,305,933 4,636,681 0 4,636,681
Other operations 58,295 0 58,295 612,707 0 612,707
----------- ----------- ----------- ----------- ----------- -----------
TOTAL OPERATING REVENUE $35,630,206 $ 0 $35,630,206 $96,213,057 $ 0 $96,213,057
----------- ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES
Cost of gas sold $20,278,075 $ 0 $20,278,075 $68,150,797 $ 0 $68,150,797
Cost of gas marketed 0 0 0 0 0 0
Operations 5,487,759 9,152 5,478,607 12,414,073 0 12,414,073
Maintenance 890,038 0 890,038 1,334,914 0 1,334,914
Depreciation 1,850,635 109,848 1,740,787 3,358,599 0 3,358,599
Income taxes 1,269,261 (285,971) 1,555,232 1,604,447 0 1,604,447
Taxes other than income 1,460,325 0 1,460,325 2,745,404 0 2,745,404
----------- ----------- ----------- ----------- ----------- -----------
TOTAL OPERATING EXPENSES $31,236,093 $ (166,971) $31,403,064 $89,608,234 $ 0 $89,608,234
----------- ----------- ----------- ----------- ----------- -----------
OPERATING INCOME $ 4,394,113 $ 166,971 $ 4,227,142 $ 6,604,823 $ 0 $ 6,604,823
----------- ----------- ----------- ----------- ----------- -----------
OTHER INCOME
Non-operating income $ 926,175 $ 0 $ 926,175 $ 1,164,595 $ 0 $ 1,164,595
Non-operating expenses 911,446 0 911,446 1,210,171 0 1,210,171
Other income taxes 5,155 0 5,155 76,235 0 76,235
----------- ----------- ----------- ----------- ----------- -----------
OTHER INCOME, NET $ 9,574 $ 0 $ 9,574 $ (121,811) $ 0 $ (121,811)
----------- ----------- ----------- ----------- ----------- -----------
INCOME BEFORE DEDUCTIONS $ 4,403,687 $ 166,971 $ 4,236,716 $ 6,483,012 $ 0 $ 6,483,012
----------- ----------- ----------- ----------- ----------- -----------
INCOME DEDUCTIONS
Interest on long-term debt $ 1,404,284 $ 1,404,284 $ 0 $ 2,405,499 $ 0 $ 2,405,499
Other interest 805,178 0 805,178 609,871 0 609,871
Amortization of debt expense 30,864 30,864 0 120,027 0 120,027
Dividends on preferred
stock of subsidiary 0 0 0 0 0 0
----------- ----------- ----------- ----------- ----------- -----------
TOTAL INCOME DEDUCTIONS $ 2,240,326 $ 1,435,148 $ 805,178 $ 3,135,397 $ 0 $ 3,135,397
----------- ----------- ----------- ----------- ----------- -----------
NET INCOME FOR COMMON $ 2,163,361 $(1,268,177) $ 3,431,538 $ 3,347,615 $ 0 $ 3,347,615
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 1994
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
--------------------------------------- SEMCO
ASSETS 1994 ELIM. PARENT SEMGC BCGC MIGC ENERGY
------ ------------ ------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
UTILITY PLANT
Plant in service at cost $287,214,359 $ 0 $ 0 $131,793,818 $46,634,616 $ 92,476,449 $16,309,476
Construction in progress 199,532 0 0 110,375 0 89,157 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL UTILITY PLANT $287,413,891 $ 0 $ 0 $131,904,193 $46,634,616 $ 92,565,606 $16,309,476
Less-Accumulated depreciation 76,673,846 0 0 52,526,087 5,080,100 16,736,592 2,331,067
------------ ------------- ------------ ------------ ----------- ------------ -----------
NET UTILITY PLANT $210,740,045 $ 0 $ 0 $ 79,378,106 $41,554,516 $ 75,829,014 $13,978,409
------------ ------------- ------------ ------------ ----------- ------------ -----------
OTHER PROPERTY
Other property, gross $ 24,408,449 $ (2,189,059) $ 1,567,274 $ 603,187 $ 49,934 $ 223,002 $24,154,111
Less-Accumulated depreciation 7,487,883 (1,018,094) 486,670 112,538 0 29,727 7,877,042
------------ ------------- ------------ ------------ ----------- ------------ -----------
OTHER PROPERTY, NET $ 16,920,566 $ (1,170,965) $ 1,080,604 $ 490,649 $ 49,934 $ 193,275 $16,277,069
------------ ------------- ------------ ------------ ----------- ------------ -----------
CURRENT ASSET
Cash $ 2,610,577 $ 0 $ 3,746,374 $ 715,525 $ 142,255 $ 1,247,506 $(3,241,083)
Accounts receivable
Accounts rec. nonaffiliate 23,696,866 (302,585) 0 8,019,157 3,600,068 10,043,418 2,336,808
Accounts rec. affiliate 0 (4,613,548) 1,821,310 198,583 683,358 426,672 1,483,625
Less-Reserve for uncollectible 889,427 0 0 176,921 179,806 316,876 215,824
------------ ------------- ------------ ------------ ----------- ------------ -----------
Accounts rec. - net 22,807,439 (4,916,133) 1,821,310 8,040,819 4,103,620 10,153,214 3,604,609
Notes receivable affiliate 0 (133,419,672) 132,496,872 0 0 0 922,800
Accrued utility revenue 33,299,569 0 0 4,471,829 2,563,016 5,348,926 20,915,798
Materials and supplies 3,352,303 0 0 1,719,105 596,650 1,036,548 0
Gas in storage 36,120,557 (1,541,440) 0 8,773,718 9,093,385 12,085,986 7,708,908
Prepaid property taxes 1,628,373 0 37,866 1,403,977 0 0 186,530
Prepayments 10,387,092 0 167,227 143,605 67,167 281,167 9,727,926
Other current assets 8,203,094 0 0 136,840 3,375,159 4,691,094 1
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CURRENT ASSETS $118,409,004 $(139,877,245) $138,269,649 $ 25,405,418 $19,941,252 $ 34,844,441 $39,825,489
------------ ------------- ------------ ------------ ----------- ------------ -----------
INVESTMENT IN SUBSIDIARIES
Southeastern Michigan Gas Co $ 0 $ (39,736,953) $ 39,736,953 $ 0 $ 0 $ 0 $ 0
Battle Creek Gas Company 0 (17,078,278) 17,078,278 0 0 0 0
SEMCO Energy Services 0 (11,831,177) 11,831,177 0 0 0 0
Michigan Gas Company 0 (41,727,893) 41,727,893 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL INVESTMENT IN SUBSIDIARIES $ 0 $(110,374,301) $110,374,301 $ 0 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
DEFERRED CHARGES
Unamortized debt expense $ 6,149,880 $ 0 $ 822,207 $ 1,912,326 $ 686,724 $ 2,728,623 $ 0
Deferred gas charges 799,012 0 0 0 99,063 699,949 0
Other deferred charges 16,209,550 0 436,574 7,851,911 2,029,942 5,512,006 379,117
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL DEFERRED CHARGES $ 23,158,442 $ 0 $ 1,258,781 $ 9,764,237 $ 2,815,729 $ 8,940,578 $ 379,117
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL ASSETS $369,228,057 $(251,422,511) $250,983,335 $115,038,410 $64,361,431 $119,807,308 $70,460,084
============ ============= ============ ============ =========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
(Unaudited Statement)
<CAPTION>
BATTLE CREEK GAS COMPANY MICHIGAN GAS COMPANY
--------------------------------------- -----------------------------------------
PUSH PURCHASE SEPARATE PUSH PURCHASE SEPARATE
ASSETS DOWN ADJUSTMENTS COMPANY DOWN ADJUSTMENTS COMPANY
------ ----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
UTILITY PLANT
Plant in service at cost $46,634,616 $(11,616,863) $58,251,479 $ 92,476,449 $(18,116,891) $110,593,340
Construction in progress 0 0 0 89,157 0 89,157
----------- ------------ ----------- ------------ ------------ ------------
TOTAL UTILITY PLANT $46,634,616 $(11,616,863) $58,251,479 $ 92,565,606 $(18,116,891) $110,682,497
Less-Accumulated depreciation 5,080,100 (13,836,487) 18,916,587 16,736,592 (18,116,891) 34,853,483
----------- ------------ ----------- ------------ ------------ ------------
NET UTILITY PLANT $41,554,516 $ 2,219,624 $39,334,892 $ 75,829,014 $ 0 $ 75,829,014
----------- ------------ ----------- ------------ ------------ ------------
OTHER PROPERTY
Other property, gross $ 49,934 $ 23,123 $ 26,811 $ 223,002 $ 0 $ 223,002
Less-Accumulated depreciation 0 0 0 29,727 0 29,727
----------- ------------ ----------- ------------ ------------ ------------
OTHER PROPERTY, NET $ 49,934 $ 23,123 $ 26,811 $ 193,275 $ 0 $ 193,275
----------- ------------ ----------- ------------ ------------ ------------
CURRENT ASSET
Cash $ 142,255 $ 0 $ 142,255 $ 1,247,506 $ 0 $ 1,247,506
Accounts receivable
Accounts receivable nonaffiliate 3,600,068 0 3,600,068 10,043,418 0 10,043,418
Accounts receivable affiliate 683,358 0 683,358 426,672 0 426,672
Less-Reserve for uncollectible 179,806 0 179,806 316,876 0 316,876
----------- ------------ ----------- ------------ ------------ ------------
Accounts receivable - net 4,103,620 0 4,103,620 10,153,214 0 10,153,214
Notes receivable affiliate 0 0 0 0 0 0
Accrued utility revenue 2,563,016 0 2,563,016 5,348,926 0 5,348,926
Materials and supplies 596,650 0 596,650 1,036,548 0 1,036,548
Gas in storage 9,093,385 603,777 8,489,608 12,085,986 0 12,085,986
Prepaid property taxes 0 0 0 0 0 0
Prepayments 67,167 0 67,167 281,167 0 281,167
Other current assets 3,375,159 0 3,375,159 4,691,094 0 4,691,094
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CURRENT ASSETS $19,941,252 $ 603,777 $19,337,475 $ 34,844,441 $ 0 $ 34,844,441
----------- ------------ ----------- ------------ ------------ ------------
DEFERRED CHARGES
Unamortized debt expense $ 686,724 $ 686,724 $ 0 $ 2,728,623 $ 0 $ 2,728,623
Deferred gas charges 99,063 0 99,063 699,949 0 699,949
Other deferred charges 2,029,942 (502,569) 2,532,511 5,512,006 0 5,512,006
----------- ------------ ----------- ------------ ------------ ------------
TOTAL DEFERRED CHARGES $ 2,815,729 $ 184,155 $ 2,631,574 $ 8,940,578 $ 0 $ 8,940,578
----------- ------------ ----------- ------------ ------------ ------------
TOTAL ASSETS $64,361,431 $ 3,030,679 $61,330,752 $119,807,308 $ 0 $119,807,308
=========== ============ =========== ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 1994
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
STOCKHOLDERS' INVESTMENT --------------------------------------- SEMCO
AND LIABILITIES 1994 ELIM. PARENT SEMGC BCGC MIGC ENERGY
- ------------------------ ------------ ------------- ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMON STOCK EQUITY
Common stock, par $1 $ 11,260,584 $ (7,929,130) $ 11,260,584 $ 7,477,030 $ 0 $ 100 $ 452,000
Capital surplus 83,711,308 (72,769,613) 83,711,308 12,819,937 24,939,248 30,919,186 4,091,242
Retained earnings 15,027,808 (29,800,117) 15,027,808 19,564,545 (7,860,970) 10,808,607 7,287,935
Common stock expense (2,620,485) 124,559 (2,476,093) (268,951) 0 0 0
Unearned comp - ESOT 0 0 0 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL COMMON STOCK EQUITY $107,379,215 $(110,374,301) $107,523,607 $ 39,592,561 $17,078,278 $ 41,727,893 $11,831,177
------------ ------------- ------------ ------------ ----------- ------------ -----------
CONVERTIBLE PREFERRED STOCK
Preferred stock, par $1 $ 7,505 $ 0 $ 7,505 $ 0 $ 0 $ 0 $ 0
Premium on preferred 180,120 0 180,120 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CONVERTIBLE PREFERRED $ 187,625 $ 0 $ 187,625 $ 0 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
PREFERRED STOCK OF SUBSIDIARIES
Preferred stock, par $100 $ 3,100,000 $ 0 $ 0 $ 3,100,000 $ 0 $ 0 $ 0
Preferred stock expense 0 0 0 0 0 0 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL PREFERRED STOCK OF SUB. $ 3,100,000 $ 0 $ 0 $ 3,100,000 $ 0 $ 0 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
LONG TERM DEBT
Long-term debt nonaffiliate $104,910,000 $ (54,000,000) $ 89,910,000 $ 23,000,000 $15,000,000 $ 31,000,000 $ 0
Long term debt-ESOT 0 0 0 0 0 0 0
Capital lease obligation 0 (1,170,965) 0 648,629 0 522,336 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL LONG-TERM DEBT $104,910,000 $ (55,170,965) $ 89,910,000 $ 23,648,629 $15,000,000 $ 31,522,336 $ 0
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CAPITALIZATION $215,576,840 $(165,545,266) $197,621,232 $ 66,341,190 $32,078,278 $ 73,250,229 $11,831,177
------------ ------------- ------------ ------------ ----------- ------------ -----------
CURRENT LIABILITIES
Maturities of Lt-debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes payable nonaffil 50,000,000 0 50,000,000 0 0 0 0
Notes payable affil 0 (79,419,672) 922,800 12,670,188 18,430,000 14,800,000 32,596,684
Accounts payable nonaffil 36,245,391 (1,844,025) 636,273 4,566,483 4,422,966 8,589,974 19,873,720
Accounts payable affil 0 (4,613,548) 27,364 2,001,408 388,990 1,003,111 1,192,675
Customer adv. payments 8,736,348 0 0 3,984,599 907,767 3,843,982 0
General taxes accrued 366,311 0 0 117,312 (18,913) 171,509 96,403
Income taxes accrued 360,686 0 366,966 793,969 (1,225,040) 747,972 (323,181)
Interest accrued 1,144,799 0 1,129,738 0 3,758 11,303 0
Amts. payable to custs. 114,882 0 0 107,225 5,282 2,375 0
Accum def inc taxes-curr (2,470,787) 0 (165,717) (1,000,591) 121,812 (1,377,002) (49,289)
Other current liabs. 7,723,125 0 (308,169) 2,557,105 795,183 2,685,253 1,993,753
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL CURRENT LIABILITIES $102,220,755 $ (85,877,245) $ 52,609,255 $ 25,797,698 $23,831,805 $ 30,478,477 $55,380,765
------------ ------------- ------------ ------------ ----------- ------------ -----------
DEFERRED CREDITS
Accum. def. income taxes $ 18,721,783 $ 0 $ (218,106) $ 4,086,229 $ 5,193,398 $ 6,559,818 $ 3,100,444
Unamortized ITC 3,324,529 0 0 2,195,335 50,401 1,078,793 0
Deferred gas costs 866,388 0 0 0 99,063 767,325 0
Customer advances 8,559,172 0 0 5,953,159 228,718 2,377,295 0
Other 19,958,590 0 970,954 10,664,799 2,879,768 5,295,371 147,698
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL DEFERRED CREDITS $ 51,430,462 $ 0 $ 752,848 $ 22,899,522 $ 8,451,348 $ 16,078,602 $ 3,248,142
------------ ------------- ------------ ------------ ----------- ------------ -----------
TOTAL EQUITY AND LIABS. $369,228,057 $(251,422,511) $250,983,335 $115,038,410 $64,361,431 $119,807,308 $70,460,084
============ ============= ============ ============ =========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
(Unaudited Statement)
<CAPTION>
BATTLE CREEK GAS COMPANY MICHIGAN GAS COMPANY
--------------------------------------- -----------------------------------------
PUSH PURCHASE SEPARATE PUSH PURCHASE SEPARATE
STOCKHOLDERS' INVESTMENT AND LIABILITIES DOWN ADJUSTMENTS COMPANY DOWN ADJUSTMENTS COMPANY
- ---------------------------------------- ----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Common stock, par $1 $ 0 $ (2,932) $ 2,932 $ 100 $ 0 $ 100
Capital surplus 24,939,248 19,948,146 4,991,102 30,919,186 1,486,318 29,432,868
Retained earnings (7,860,970) (29,223,737) 21,362,767 10,808,607 (1,486,318) 12,294,925
Common stock expense 0 0 0 0 0 0
Unearned comp - ESOT 0 0 0 0 0 0
----------- ------------ ----------- ------------ ------------ ------------
TOTAL COMMON STOCK EQUITY $17,078,278 $ (9,278,523) $26,356,801 $ 41,727,893 $ 0 $ 41,727,893
----------- ------------ ----------- ------------ ------------ ------------
LONG TERM DEBT
Long-term debt nonaffiliate $15,000,000 $ 15,000,000 $ 0 $ 31,000,000 $ 0 $ 31,000,000
Long term debt-ESOT 0 0 0 0 0 0
Capital lease obligation 0 0 0 522,336 0 522,336
----------- ------------ ----------- ------------ ------------ ------------
TOTAL LONG-TERM DEBT $15,000,000 $ 15,000,000 $ 0 $ 31,522,336 $ 0 $ 31,522,336
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CAPITALIZATION $32,078,278 $ 5,721,477 $26,356,801 $ 73,250,229 $ 0 $ 73,250,229
----------- ------------ ----------- ------------ ------------ ------------
CURRENT LIABILITIES
Maturities of Lt-debt $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Notes payable nonaffil 0 0 0 0 0 0
Notes payable affil 18,430,000 0 18,430,000 14,800,000 0 14,800,000
Account payable nonaffil 4,422,966 0 4,422,966 8,589,974 0 8,589,974
Accounts payable affil 388,990 0 388,990 1,003,111 0 1,003,111
Customer adv. payments 907,767 0 907,767 3,843,982 0 3,843,982
General taxes accrued (18,913) 0 (18,913) 171,509 0 171,509
Income taxes accrued (1,225,040) 0 (1,225,040) 747,972 0 747,972
Interest accrued 3,758 0 3,758 11,303 0 11,303
Amts. payable to custs. 5,282 0 5,282 2,375 0 2,375
Accum def inc taxes-curr 121,812 211,322 (89,510) (1,377,002) 0 (1,377,002)
Other current liabs. 795,183 0 795,183 2,685,253 0 2,685,253
----------- ------------ ----------- ------------ ------------ ------------
TOTAL CURRENT LIABILITIES $23,831,805 $ 211,322 $23,620,483 $ 30,478,477 $ 0 $ 30,478,477
----------- ------------ ----------- ------------ ------------ ------------
DEFERRED CREDITS
Accum. def. income taxes $ 5,193,398 $ (672,651) $ 5,866,049 $ 6,559,818 $ 0 $ 6,559,818
Unamortized ITC 50,401 (829,892) 880,293 1,078,793 0 1,078,793
Deferred gas costs 99,063 0 99,063 767,325 0 767,325
Customer advances 228,718 0 228,718 2,377,295 0 2,377,295
Other 2,879,768 (1,399,577) 4,279,345 5,295,371 0 5,295,371
----------- ------------ ----------- ------------ ------------ ------------
TOTAL DEFERRED CREDITS $ 8,451,348 $ (2,902,120) $11,353,468 $ 16,078,602 $ 0 $ 16,078,602
----------- ------------ ----------- ------------ ------------ ------------
TOTAL EQUITY AND LIABS. $64,361,431 $ 3,030,679 $61,330,752 $119,807,308 $ 0 $119,807,308
=========== ============ =========== ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
DECEMBER 31, 1994
(Unaudited Statement)
<CAPTION>
LOCAL DISTRIBUTION COMPANIES
CURRENT MONTH -------------------------------------
------------- SEM B C MICH SEMCO
TOTAL ELIM. PARENT GAS CO GAS CO GAS CO ENERGY
----------- ------------ ----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Beginning of Month $12,570,892 $(58,750,269) $12,570,892 $18,604,673 $20,618,531 $12,496,671 $7,030,394
Additions:
Net income 2,456,916 (2,654,403) 2,456,916 1,004,372 744,236 648,254 257,541
Tax benefit-ESOT div. 0 0 0 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
Total Additions $ 2,456,916 $ (2,654,403) $ 2,456,916 $ 1,004,372 $ 744,236 $ 648,254 $ 257,541
----------- ------------ ----------- ----------- ----------- ----------- ----------
Deductions:
Cash divs. on common 0 (850,000) 0 0 0 850,000 0
Cash divs. on pref. 0 (44,500) 0 44,500 0 0 0
Stock dividend 0 0 0 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
Total Deductions $ 0 $ (894,500) $ 0 $ 44,500 $ 0 $ 850,000 $ 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
End of Month $15,027,808 $(60,510,172) $15,027,808 $19,564,545 $21,362,767 $12,294,925 $7,287,935
=========== ============ =========== =========== =========== =========== ==========
Beginning of Year $13,691,914 $(58,184,385) $13,691,914 $18,914,374 $21,431,229 $12,347,310 $5,491,472
Additions
Net income 10,009,379 (13,403,787) 10,009,379 4,828,171 3,431,538 3,347,615 1,796,463
Tax benefit-ESOT div. 0 0 0 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
Total additions $10,009,379 $(13,403,787) $10,009,379 $ 4,828,171 $ 3,431,538 $ 3,347,615 $1,796,463
----------- ------------ ----------- ----------- ----------- ----------- ----------
Deductions
Cash divs. on common 8,655,956 (10,900,000) 8,655,956 4,000,000 3,500,000 3,400,000 0
Cash divs. on pref. 17,529 (178,000) 17,529 178,000 0 0 0
Stock dividend 0 0 0 0 0 0 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
Total deductions $ 8,673,485 $(11,078,000) $ 8,673,485 $ 4,178,000 $ 3,500,000 $ 3,400,000 $ 0
----------- ------------ ----------- ----------- ----------- ----------- ----------
End of Year To Date $15,027,808 $(60,510,172) $15,027,808 $19,564,545 $21,362,767 $12,294,925 $7,287,935
=========== ============ =========== =========== =========== =========== ==========
Percent of Dividends
to Net Income 86.48%
===========
</TABLE>
<PAGE>
<TABLE>
SOUTHEASTERN MICHIGAN GAS ENTERPRISES, INC.
CONSOLIDATED STATEMENT OF CAPITAL SURPLUS
FOR THE YEAR ENDED DECEMBER 31, 1994
UNAUDITED
---------
<CAPTION>
NATURAL GAS GROUP
------------------------------------
SEM B C MICH SEMCO
TOTAL ELIM. PARENT GAS CO GAS CO GAS CO ENERGY
----------- ------------ ----------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL SURPLUS - BEGINNING OF YEAR $64,211,005 $(53,926,391) $64,211,005 $12,819,937 $4,991,102 $29,432,868 $4,091,242
----------- ------------ ----------- ----------- ---------- ----------- ----------
ADD -
Excess of common stock issued in
connection with dividend
reinvestment plan over par value $ 5,465,262 $ 0 $ 5,465,262 $ 0 $ 0 $ 0 $ 0
Excess of common stock issued to
Employee Stock Ownership Trust
(ESOT) over par value 0 0 0 0 0 0 0
Excess of common stock issued in
connection with conversion of
preferred shares over par value 2,089 0 2,089 0 0 0 0
Excess of common stock issued in
connection with public stock
offering over pay value 14,576,250 0 14,576,250 0 0 0 0
----------- ------------ ----------- ----------- ---------- ----------- ----------
$20,043,601 $ 0 $20,043,601 $ 0 $ 0 $ 0 $ 0
DEDUCT -
Issuance of 5% stock dividend $ 543,298 $ 0 $ 543,298 $ 0 $ 0 $ 0 $ 0
----------- ------------ ----------- ----------- ---------- ----------- ----------
CAPITAL SURPLUS - END OF YEAR $83,711,308 $(53,926,391) $83,711,308 $12,819,937 $4,991,102 $29,432,868 $4,091,242
=========== ============ =========== =========== ========== =========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR3
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statement of income, the consolidated balance sheet and the
consolidated statement of cash flows and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<BOOK-VALUE> PER-BOOK
<TOTAL-ASSETS> 371,698
<TOTAL-OPERATING-REVENUES> 372,430
<NET-INCOME> 9,992
</TABLE>
